HHS awards $111M for website development, with 3 bidders competing for this task order

Contract Overview

Contract Amount: $111,001,817 ($111.0M)

Contractor: AD HOC LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2019-12-20

End Date: 2025-01-31

Contract Duration: 1,869 days

Daily Burn Rate: $59.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: WEBSITE DEVELOPMENT SUPPORT 2.0 (WDS 2.0) TASK ORDER

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $111.0 million to AD HOC LLC for work described as: WEBSITE DEVELOPMENT SUPPORT 2.0 (WDS 2.0) TASK ORDER Key points: 1. The contract's firm-fixed-price structure aims to control costs for custom computer programming. 2. A full and open competition indicates a healthy market for these services. 3. The duration of over 5 years suggests a long-term need for website development support. 4. The task order is part of a larger contract vehicle, implying potential for follow-on work. 5. The award value is substantial, requiring careful monitoring of performance and value. 6. The absence of small business set-asides may limit opportunities for smaller firms in this specific award.

Value Assessment

Rating: good

The contract's firm-fixed-price (FFP) type is generally favorable for cost control, especially for well-defined services like website development. Benchmarking the per-unit cost is difficult without more granular data on the specific services rendered under this task order. However, the total award value of $111 million over approximately 5.5 years suggests a significant investment. Comparing this to similar large-scale website development contracts within the federal government would provide a clearer picture of value for money. The competitive nature of the award is a positive indicator for pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This task order was awarded under a full and open competition, meaning all responsible sources were permitted to submit offers. With three bidders participating, the competition level appears moderate. A higher number of bidders typically suggests more robust price discovery and potentially lower prices for the government. However, three bidders still indicate that multiple firms were interested and capable of performing the work, which is a positive sign for competition.

Taxpayer Impact: The full and open competition with multiple bidders suggests that taxpayers are likely benefiting from competitive pricing, as vendors vied to offer their best terms to secure this significant contract.

Public Impact

Beneficiaries include users of the Centers for Medicare and Medicaid Services (CMS) websites, who will experience improved functionality and user experience. The services delivered encompass custom computer programming and website development, crucial for modern digital government services. The geographic impact is national, as CMS serves beneficiaries across the United States. The contract supports the IT workforce within the contractor organization and potentially indirectly through the services provided to CMS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not tightly managed over the long contract duration.
Dependence on a single contractor for critical website infrastructure could pose a risk if performance falters.
Ensuring continued innovation and adaptation to evolving web technologies over the contract period.

Positive Signals

Firm-fixed-price contract type helps manage cost certainty.
Full and open competition suggests a competitive market and potential for good pricing.
Long-term nature of the task order allows for sustained development and support of critical CMS web assets.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming and website development. The federal IT services market is vast, with significant spending on software development, cloud services, and digital transformation initiatives. The Centers for Medicare and Medicaid Services (CMS) is a major federal agency with extensive digital needs, making website development and maintenance a critical area of expenditure. Comparable spending benchmarks for large-scale federal website development projects can vary widely based on complexity, but this award is substantial, reflecting the importance of CMS's online presence.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that both large and small businesses could compete, but the award did not specifically target small business participation. Consequently, there may be limited direct subcontracting opportunities for small businesses unless the prime contractor voluntarily includes them. The overall impact on the small business ecosystem for this specific award is likely minimal, as it was not designed to boost small business contracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Centers for Medicare and Medicaid Services (CMS). Performance monitoring, quality assurance, and adherence to contract terms are key oversight functions. Transparency is facilitated through contract award databases like FPDS. While specific Inspector General (IG) jurisdiction for this particular task order isn't detailed, the HHS OIG generally has oversight over HHS contracts to ensure efficiency and prevent fraud, waste, and abuse.

Related Government Programs

CMS Health Insurance Marketplace
Healthcare.gov
Federal Civilian IT Modernization
Custom Software Development Services
Digital Government Services

Risk Flags

Long contract duration may lead to technology obsolescence.
Potential for scope creep if requirements are not tightly managed.
Dependence on a single contractor for critical web services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $111.0 million to AD HOC LLC. WEBSITE DEVELOPMENT SUPPORT 2.0 (WDS 2.0) TASK ORDER

Who is the contractor on this award?

The obligated recipient is AD HOC LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $111.0 million.

What is the period of performance?

Start: 2019-12-20. End: 2025-01-31.

What is the track record of AD HOC LLC in performing similar federal IT contracts, particularly those involving website development?

Assessing the track record of AD HOC LLC requires a review of their past performance on federal contracts. This would involve examining contract databases for previous awards, their value, duration, and the services performed. Specifically, looking for experience with large-scale website development, custom programming, and support for government agencies, especially in the healthcare sector, would be crucial. Past performance evaluations, if available, provide insights into their ability to meet technical requirements, manage schedules, and control costs. A history of successful contract completions and positive performance reviews would indicate a lower risk for this current task order. Conversely, a history of performance issues, contract disputes, or terminations would raise concerns about their capability to deliver on the WDS 2.0 task order effectively.

How does the awarded amount of $111 million compare to the estimated value or budget for this website development support requirement?

The awarded amount of $111,001,817.05 represents the total ceiling value for the Delivery Order (task order) issued under a larger contract vehicle. To assess value for money, this figure needs to be compared against the government's initial estimate or budget for the WDS 2.0 requirements. If the awarded amount is significantly lower than the government's estimate, it suggests successful price negotiation and competitive pressure. Conversely, if it's close to or exceeds the estimate, it might warrant further scrutiny. Additionally, comparing this value to similar large-scale federal website development projects, considering their scope, complexity, and duration, can provide a benchmark. The firm-fixed-price (FFP) nature of the award implies that the government has negotiated a set price for the defined scope, making the awarded amount the definitive cost unless modifications occur.

What are the primary risks associated with a 5.5-year contract for website development, and how are they being mitigated?

A contract duration of approximately 5.5 years (from December 2019 to January 2025) for website development presents several risks. Technological obsolescence is a key concern; web technologies evolve rapidly, and a system developed today might be outdated by the end of the contract. Scope creep is another risk, where requirements may expand beyond the original intent, leading to cost overruns or schedule delays, although the FFP structure aims to mitigate this. Contractor performance degradation over time is also possible. Mitigation strategies likely include robust contract management, regular performance reviews, clearly defined milestones, change control processes, and potentially incorporating flexibility for technology refreshes or updates within the contract's framework. The government's ability to adapt requirements and ensure the contractor stays current with industry best practices is crucial for mitigating these risks.

What is the historical spending pattern for website development and IT support services by the Centers for Medicare and Medicaid Services (CMS)?

Analyzing historical spending patterns for CMS in website development and IT support is essential for contextualizing the $111 million WDS 2.0 task order. CMS, as a critical agency managing vast amounts of sensitive health data and serving millions of beneficiaries, relies heavily on its digital infrastructure. Historically, CMS has invested significantly in IT modernization, maintaining and enhancing its public-facing websites (like Medicare.gov, Medicaid.gov, and aspects related to HealthCare.gov), and internal systems. Spending in this area often fluctuates based on major program initiatives, legislative changes, and the need to upgrade legacy systems. Examining previous contract awards for similar services, their values, and durations can reveal trends in CMS's IT procurement strategy and highlight whether this $111 million award represents a typical investment, an increase, or a decrease in spending for such services.

Given the 'FULL AND OPEN COMPETITION' and 3 bidders, what does this imply about the market competitiveness for custom computer programming services?

A 'FULL AND OPEN COMPETITION' with three bidders for custom computer programming services suggests a moderately competitive market for this specific contract. 'Full and open' means the government solicited proposals from all eligible sources, maximizing potential competition. The presence of three bidders indicates that multiple companies possessed the capability and interest to pursue this significant task order. While more bidders generally lead to greater price competition and potentially better value, three is a reasonable number that suggests the market is not overly concentrated or lacking in qualified vendors. This level of competition implies that AD HOC LLC likely had to offer competitive pricing and demonstrate strong capabilities to win the award, which is generally beneficial for the government and taxpayers. It also suggests that the barriers to entry for such contracts are manageable for firms with the right expertise.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: RFQCMS200266

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1676 INTERNATIONAL DR STE 530, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $111,001,817

Exercised Options: $111,001,817

Current Obligation: $111,001,817

Actual Outlays: $74,249,277

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F392DA

IDV Type: FSS

Timeline